Oral Answers to Questions

Tony Lloyd Excerpts

Tuesday 8th June 2010 Commons Chamber

The Chancellor of the Exchequer was asked—

[Tony Lloyd (Manchester Central) (Lab)]

1. What assessment he has made of the effect on economic growth of the programme of expenditure reductions announced on 24 May 2010.

[The Chancellor of the Exchequer (Mr George Osborne)]

The Treasury’s assessment is that the effect will be positive. The in-year reductions in spending are part of the Government’s efforts to bring down the budget deficit, the level of which threatens the recovery. This weekend the G20 stated:

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation. We welcome the recent announcements by some countries”—

including Britain—

“to reduce their deficits in 2010”.

[Tony Lloyd]

I welcome the Chancellor to his place, but will he have the candour to admit that his strategy is very risky, because it risks putting this country back into a double-dip recession? In any case there will be losers, so will he say who they will be?

[Mr Osborne]

Let us be clear about who the losers would be if we did not deal with this record budget deficit. The whole country would lose out, because there would be higher interest rates, more businesses would go bust and international investor confidence would be lost. The hon. Gentleman needs to examine what is happening in the rest of the world, and realise that because Britain has the largest budget deficit of any advanced economy, we have to get on and deal with it.